Privately held wind farmer First Wind last week filed a prospectus with the Securities and Exchange Commission in which it said it would seek $450 million via an initial public offering. Should you be buying? I won't be. Here's why.

First Wind expects to trade under the symbol WNDY on the Nasdaq, joining Thomas & Betts (NYSE:TNB), Otter Tail (NASDAQ:OTTR), and Woodward Governor (NASDAQ:WGOV) as plays on the potential for wind power.

I understand the allure, especially for cheapskates. Solar stocks are sexy and more likely to be overvalued. First Solar (NASDAQ:FSLR), for example, is among those to have fallen dramatically from a 52-week high, achieved in May. Wind farmers aren't as known, nor are the companies that produce the equipment needed to harvest wind.

But that's changing, thanks to oil tycoon T. Boone Pickens. He says wind is the next growth industry. I believe him. I also think that Foolish colleague Ryan Fuhrmann is right when he calls Denmark's Vestas Wind Systems (OTC BB: VWSYF.PK) the class of the industry. So, apparently, do most of the investors who've rated Vestas in our 110,000-strong Motley Fool CAPS community:


Vestas Wind

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Data current as of Aug. 4, 2008.

First Wind differs from Vestas in two key areas. First, it's a farmer. Vestas, by contrast, is like General Electric (NYSE:GE) in that it makes and sells turbines. Second, Vestas has been profitable since 2006, with a solid balance sheet. First Wind, on the other hand, will need to spend a good chunk of the $450 million it plans to raise in the IPO to pay off debt.

Take the tailwind
I like First Wind's story. Within five years, the prospectus says, management expects to have secured 1,407 megawatts of wind energy via farms on both coasts, Hawaii, and the western Plains -- about five times more than the 274 at the end of this year.

What I don't like is the capital needed to fulfill this promise. I'd rather bet on those built to reap the hundreds of millions that First Wind and its peers will be spending. Turbine suppliers like Vestas, for instance.

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Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. When he's not typing up articles for, you'll find him picking growth stocks for Rule Breakers.

Otter Tail is a Motley Fool Hidden Gems recommendation. Try this market-beating service free for 30 days. There's no obligation to subscribe. The Fool's disclosure policy was last seen running like the wind.